by Jerry Blair
In the quiet of
his office in Sacramento, venture capitalist Roger Akers could be planning
the strategy of his newest entrepreneurial discovery. Or, his mind could
be on fly-casting on the quiet waters of a secret California stream.
His passions run equally deep for both.
Akers is managing
partner of Akers Capital, specializing in capital investments in technology-based
His value to the
development of the regional technology industry has not gone unrecognized:
in 2002, he was voted the Business Champion of the Year in the Sacramento
region. That recognition was surely well deserved considering the rough
waters he is casting into during this economic slump -- especially in
Akers optimism about continued growth for the technology sector of the
Sacramento area reaches a decade into the future. Ask
any angler and they will tell you that you must be optimistic when you're
casting in swift running waters.
What is Akers
Akers Capital is
a investment firm specializing in private equity investments in small
cap technology-based companies. We're a venture capital firm.
Tell me a little
bit about what it takes to stir up the interest in that industry in
Well, that's a very
good question. In order to develop that interest, people have to be
educated as to what the opportunities are. And in the past that has
been very, very difficult to do in many cities, let alone Sacramento.
But here, really focusing on a number of organizations that can educate
the community with a consistent message has been one of the things that
we've worked very hard in doing. And that really has taken shape over
the last couple of years. And it's working very, very well. But the
message is now becoming more focused.
So, you've pretty
much got to be the one who goes out and finds the people who can generate
the interest, in other words. What organizations have you ferreted out
that have been able to drive the interest?
I've worked in conjunction
with the Chamber of Commerce; I've worked with the Golden Capital Network,
which is a very good organization for the development of entrepreneurial
based companies in the region. We've also worked with and helped build
the SARDA Board which is going to be critical to the success in the
future of the area. We also worked with the AEA -- the American Electronics
Association -- in helping build that infrastructure here locally.
Tell us a little
bit about the importance of the industry in this region.
I think technology
is absolutely critical to this area in terms of its future development
of quality jobs going forward. And we have to kind of look at the background
and the characteristics of the Sacramento region. But we've got some
big core companies in the tech field like Intel, like HP, like Oracle...like
NEC, that are very committed to this area. And small business development
in the tech sector that are generated from those types of companies,
because people leave those companies and start businesses with great
innovation. Great ideas that are better managed in a small startup environment
versus a large corporate setting is again going to be crucial to our
area to build those big Fortune 500 companies from small businesses
with great ideas. And the great part about Sacramento is that we've
got very innovative people, very idea-driven people. Great engineering
talent from some of these companies that have started businesses over
the last few years are going to help us. We're seeing serial entrepreneurs
from past business endeavors starting new businesses once again, and
that's a very positive thing for this area that we didn't see ten years
ago. It's having those types of people in the area that can build those
kinds of companies.
With the economy
not quite sure where it is at the moment and some of the large companies
in the technology industry having a hard time of it, is that affecting
the ability to draw entrepreneurs in to the area?
I actually think
that there are some very positive aspects to this. I know we all
of us like a down economy, that's for certain. But at the same time,
you have to look at: the availability of high quality people is now
better. The people with solid ideas, solid business plans, that want
to take companies -- it's no longer possible to have a marginal plan
get funded or to attract people to that kind of a plan. Now you have
to have solid plans, solid people, all the right characteristics so
that you know what the revenue generating potential for a company is
going to be. And therefore the investors will pick it up and make those
kinds of investments and those kinds of deals. And what we're finding
is better quality deals, better staffed than maybe in the past because
it was harder to find better quality people.
Why do you think
Well, simply because
there's less demand by the larger companies. There have been layoffs
by the larger companies. There are people working for larger companies
that see this as a good time to start a new business. Whereas there
are cutbacks and less raises, less incentives through stock option programs
at the larger companies that are really creating a long term plan for
the future for these high quality employees. And so they go out and
start their own businesses. And let's face it, technology has allowed
that to occur where people can go out and start innovative new businesses
and small businesses, because technology capabilities allow that to
Pretend I'm someone
who has an idea of starting a company here. What could you tell me about
the Sacramento region that would make me want to develop a business
in this area?
Well, again we can
go back to the fact that we've got a great base to recruit from. We
can look at the success stories of existing companies that have built
new businesses here, and also new companies that have moved here from
various parts of the country to develop their businesses here in the
Sacramento area. So we're built for success. Another very exciting part
of that is in the last few years the development of infrastructure that
helps support entrepreneurial development and company development for
small businesses has occurred. And that's why I'm very optimistic about
what's going to happen in the future in Sacramento. Because we have
very focused organizations for those entrepreneurs to be successful.
Again including SARDA, including AEA that's been involved for quite
some time now, as well as Golden Capital Network. The University is
becoming much more involved in privatization of technology and the support
of that relationship and that bond between the public and private sectors.
So I think if you take all those things into consideration I think someone
thinking of starting a business or moving here from the outside would
see the Sacramento area as being conducive to the development of new
Taking it one
notch further, are there specific portions of the industry that are
showing interest here that you can point to?
Obviously in Sacramento...we're
not Silicon Valley. To go out and look at Sacramento strategically and
say that we have very developed core competencies in the region in specific
areas, I wouldn't say that we're there yet. But I will say that there
are very, very good areas developing now. Those include in the telecommunications
arena, in the semiconductor arena, and the biomedical arena are all
areas of growth and we see multiple companies in that area. The growth
in the biotechnology arena is absolutely amazing and the number of companies
and the amount of money being invested in the local area in that field...so
I'm very optimistic about all of them.
Has your company
been involved at all with the biotech industry in the area?
Well, we haven't
been to date but I will say we're currently evaluating an opportunity
to be in the biotech arena and it's looking very, very good. In our
subsequent fund we're out raising now we are going to invest in the
biotech and have expertise in that beyond our normal IT expertise that
we've had in the past.
What does it
take to maintain this interest in technology in a region that has historically
been steeped in agriculture?
Well, I think the
impetus is somewhat
is just a normal evolution for a great place
such as Sacramento. The quality of life issues that people are confronting
and still wanting high quality jobs and a great place to work -- you
know, that's Sacramento. We can hire out of the Bay Area, we can bring
people, we can bring technology from the Bay Area, and from other places
in California to Sacramento. We have access to all the recreational
facilities in just this immediate area -- so I think that's one of the
great characteristics. Another thing would be our ability now to bring
venture capital and invest on a local level here in the Sacramento region,
and then bring other syndication partners in to invest with us from
the outside -- maybe larger investment firms from the outside to invest
in businesses in this area. I think as that evolves and grows over the
next couple of years I think that's going to be a huge presence in this
economy. I think Sacramento is poised for great growth to occur.
Looking at a
slightly broader picture, we all know about swift developing technology
companies surrounding the Sacramento area. Are you now looking elsewhere
in the Valley at all, at areas that might be ripe for development?
We've been pretty
focused in just the nine county area around the Sacramento region. In
terms of investing on a local basis, it's our feeling that to help companies
grow from an investment capital perspective and to provide added value
to those companies beyond just providing them money, that we need to
be relatively close to them and supporting them. So that's part of that
reason. That doesn't mean there aren't opportunities in other places,
but we basically focus on non-Bay Area related northern California as
far as our investment focus is concerned. That doesn't mean there aren't
other places that are developing.
The reason I
ask is because when we looked at the economy early on we heard a lot
about the development of cluster industries in various regions up and
down the Valley and I just wondered whether that had some impact on
where you might look for the next opportunity?
Well, you have to
give the Sacramento region a lot of credit because the fact that we
do have the Intels, the Oracles, the HPs in this area that provide that
solid base of engineering talent -- as an example, senior management
talent. So, it is more difficult in other areas outside the Sacramento
region, but nevertheless we know of great high quality software companies
in Eureka. There's a semiconductor company up in Redding that's doing
fabulous things. We know companies over in Monterey that are very successful.
I've spent some time in this past year working on a couple of projects
in Fresno and down in that area. So, I've got kind of a feel of what's
going on in at least those parts of California, and there's a lot of
innovation occurring and a lot of quality companies developing, but
I think it has more to do with the types of companies developing in
those areas versus those maybe that can develop in a region that has
the resources that Sacramento does. Because Sacramento would be able
to support multiple different types of technology development, whereas
those companies are maybe a little bit more limited -- maybe more software
Do you see Sacramento
continuing to be a successful hub for this type of development over
the next five or ten years?
Well, I'm an optimist
in any case, but I'm very, very excited about our potential and I believe
that while nobody wants to
Maybe we don't want to become L.A.
in Sacramento. I do see just explosive growth. I mean, we've already
seen explosive growth in the Sacramento region, but I think from a tech
perspective, I see us moving very, very quickly over the next five to
ten years. Lots of investment capital will be invested here. We'll be
able to develop a great infrastructure, as we talked about before, in
those areas of core competencies in this area. I see us having some
very solid wins in that area and some very high quality businesses developing
from that. And so I'm very optimistic about what's going to occur.
If the growth
is as fast and as robust as you see it, do you have a fear that we could
turn into a San Jose?
Well, I guess we
live here for the quality of life, but yes, I do. I do see that as a
great potential. San Jose in terms of the number of technology companies
over the next ten years? Probably not. In terms of people and traffic
and those kinds of issues -- yes I do. I see us becoming
a very cost-effective, affordable, high quality place to live and a
lot of people are recognizing that and moving from places where they
weren't enjoying a high quality of life. So, I guess that's just part
of our evolution as a region. I'd just like to add that we don't have
a large number of corporate headquarters in the Sacramento region and
that's one of the things that have kind of held the area back in the
past. We've relied on jobs -- government based jobs -- for a long period
of time. We have a few headquarters here but not a lot. There are cities
in the country that have a lot less population than Sacramento that
have many corporate headquarters there. I think that we're going to
make some real strides in that direction in the future with companies
that are going to recognize Sacramento, maybe moving their corporate
headquarters here for a variety of reasons and that's going to be something
that's also going to generate growth in the region and make the region
more viable from a business development perspective.
you most about what you do? What's your greatest joy in your work?
Well, that's very,
very simple. I've been asked that question a number of times. Being
able to work with the brightest and smartest people, maybe in the world,
I get exposed to many, many of them and I think that's what I enjoy
the most is meeting and working with very, very talented people. The
second love there is is when you finally invest in a company and you
get to help that company grow and build a successful company. That's
a very...it's one of the best feelings in the world to have a company
grow successfully -- and not just from a financial perspective, but
from the perspective of bringing a high quality group of people together
and having them work in a very focused, efficient manner.
Could you tell
us about the award you were given this year?
They have a High
Tech Direct Gold Strike award, and recently I was voted the Business
Champion of the Year in the Sacramento region and that was a very nice
recognition. I appreciated it very, very much. We work a lot with people.
Venture capital has a great deal to do with organizational development
and channel development-type work for the companies you invest in. But
because of that you have great access to a large numbers of people that
are looking for career change, job changes, maybe wanting to become
more entrepreneurial from larger firms and that sort of thing. So, we
work a lot with a lot of different people that want to fit in with entrepreneurial-based
companies and so that's very exciting and I enjoy that a good bit.